Unit 5.5: Running the Trustee Board

• Topic 01

  The Principal Contents of the Memorandum and Articles of Association of a Corporate Trustee

  42 questions
• Topic 02

  The Principal Elements and Features of a Scheme Business Plan

  44 questions
• Topic 03

  The Important Components of the Job Descriptions for the Chair and for Other Trustees

  41 questions

A few questions from this unit, with the answer and a full explanation. The complete bank is available when you start practising.

1. Is a scheme business plan a forward-looking document or a backward-looking record?

   • A
     It is backward-looking, functioning as the scheme's statutory annual report.
   • B
     It is a hybrid document that only ever records historical investment performance.
   • C
     It is backward-looking, recording what the board has already decided and done.
   • D
     It is forward-looking, setting the board's objectives and timetable ahead.
     Correct answer
   Explanation

   A business plan looks ahead: it sets objectives, a timetable and resourcing for the period to come. The backward-looking equivalent, recording what has already happened, is the trustee report and accounts. Key takeaway: business plan forward, report and accounts backward.

2. A scheme with 90 members is growing quickly and expects to cross the General Code's Own Risk Assessment membership threshold within the next reporting cycle. What governance step would be prudent for the trustees to take in anticipation of this?

   • A
     Suspend the trustee board's business plan until the scheme formally exceeds the threshold.
   • B
     Convert immediately to a corporate trustee structure, since only corporate trustees can complete an Own Risk Assessment.
   • C
     Apply to TPR for a permanent exemption from the Own Risk Assessment requirement given its current membership.
   • D
     Start building governance evidence, such as a business plan and risk register, ahead of formally crossing the threshold.
     Correct answer
   Explanation

   Because the ORA depends on evidence such as a well-maintained business plan and risk register built up over time, a scheme anticipating crossing the membership threshold benefits from starting to strengthen that underlying governance evidence in advance, rather than scrambling to assemble it only once the requirement formally bites. Key takeaway: preparing the underlying governance documentation ahead of crossing the ORA threshold puts a growing scheme in a stronger position when the requirement applies.

3. A trustee board's governing documents are silent on casting votes, and the board treats this silence as meaning the chair automatically has one. Why is this interpretation of the silence incorrect?

   • A
     The interpretation is correct provided the chair has served on the board for more than three years.
   • B
     The interpretation is incorrect because casting votes can only ever be granted by The Pensions Regulator, not a trust deed.
   • C
     The interpretation is correct: silence on the point is always read as an implied grant of a casting vote to the chair.
   • D
     Silence in a trust deed does not, by itself, confer a casting vote; the chair has none unless one is expressly granted.
     Correct answer
   Explanation

   For an individual trustee board governed by a trust deed, silence on the casting vote question does not amount to an implied grant; the chair has a casting vote only where the governing document expressly says so. Key takeaway: treat silence on a casting vote as absence of one, not as an implied grant.